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HomeMy WebLinkAboutApprove a City Council Position on Legislation Pending Befor Wg ) Council/Agency Meeting Held: a� / -or � Deferred/Continued to: % Ap rT d Co ditionally Ap roved ❑ Denied Signatu e Council Meeting Date: 5/19/08 Department ID Number: AD 08-06 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL. ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Jill Hardy, Council Member, Chair on behalf of Intergovernmental Relations Committee Members Mayor Pro Tern Keith Bohr, and Councilman Don Hansen PREPARED BY: Patricia Dapkus, Department Analyst, Senior SUBJECT: APPROVE A CITY COUNCIL POSITION ON LEGISLATION PENDING BEFORE THE FEDERAL, STATE, OR REGIONAL GOVERNMENTS AS RECOMMENDED BY THE CITY,COUNCIL INTERGOVERNMENTAL RELATIONS COMMITTEE (IRC) Statement fissue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: Approval of City Council positions as recommended by the City Council Intergovernmental Relations Committee (IRC) on legislation or budget issues pending before a federal, state, or regional government; and approval of the city's federal funding agenda for this year. Funding Source: N/A Recommended Action: Motion to: 1. SUPPORT Federal Bills S 1499 (Feinstein / Boxer) and HR 2548 (Solis) Marine Vessel Emissions Reduction Act—As Introduced 2. OPPOSE SB 1338 (Migden) Workers' Compensation: Medical Treatment: Predesignation of Physicians —As Amended on 4/30/08 3. SUPPORT AB 2873 (Solorio / Silva) Counties: Sheriffs' Duties: Coastlines, Harbors, and Inland Waterways —As Amended on 4/14/08 4. OPPOSE AB 2676 (Calderon) — Taxation: Transient Occupancy Tax—As Introduced 5. SUPPORT League of California Cities Campaign to Reform Municipal Bond Ratings Alternative Action(s): Do not take the recommended action on one or all of the above and provide direction to staff on a possible city position. Search Results - THOMAS (Library of Congress) Page 4 of 5 achieve the greatest degree of emission reduction achievable through the application of technology that the Administrator determines, in accordance with this paragraph, will be available for the affected engines. ' (C) ADDITIONAL FACTORS FOR CONSIDERATION- ' (i) IN GENERAL- In promulgating a standard under this paragraph, the Administrator shall take into consideration-- ' (I) whether the engine is newly-manufactured or in-use (and, if the engine is in-use, the age of the engine); ' (II) the cost of applying an emission reduction technology in a period of time sufficient to achieve compliance with the standard; ' (III) noise, energy, and safety factors associated with the application of the technology; and (IV) the feasibility, benefits, and costs of requiring-- (aa) the maximum level of control required by regulations applicable to on-road, nonroad, and stationary engines; and ' (bb) the maximum level of control achieved by sources from which control technologies may be transferred, including sources that use advanced aftertreatment technologies. (ii) DETERMINATION- (I) IN GENERAL- If the Administrator determines, after consideration of the factors described in clause (i), that a maximum level of control described in clause (i)(IV) will not be technically achievable by January 1, 2012, the Administrator shall promulgate standards under subparagraph (A) that require the maximum level of control that the Administrator determines will be technically achievable by that date. (II) ADDITIONAL STANDARDS- If the Administrator makes a determination under subclause (1), the Administrator shall promulgate additional standards under subparagraph (A) that require, effective beginning on January 1, 2016-- ' (aa) the maximum level of control described in clause (i)(IV); or ' (bb) if the Administrator determines, after consideration of the factors described in clause W, that a maximum level of control described in subclause (IV) of that clause is not technically achievable by January 1, 2016, the maximum level of control that the Administrator determines will be technically achievable by that date. ' (2) APPLICABILITY- Standards applicable to marine engines and marine vessels promulgated under this section shall be applicable to vessels that enter or leave a port or offshore terminal of the United States, including vessels flagged in any country other than the United States. ' (3) ENFORCEMENT- http://thomas.loc.gov/cgi-bin/quely/D?c 110:1:./temp/—c 11 ONRMDjh:: 4/24/200 Search Results - THOMAS (Library of Congress) Page 5 of 5 (A) IN GENERAL- The standards established under this subsection shall be enforced 1. in accordance with subsection (f). f (B) ENFORCEMENT AGAINST CERTAIN PERSONS- At the discretion of the i Administrator, any standard established under this subsection relating to in-use j engines may be enforced against-- 1 (i) the owner or operator of an in-use engine; (ii) any person that rebuilds or maintains an in-use engine; or (iii) such other person as the Administrator determines to be appropriate. JI ` (4) NO EFFECT ON OTHER AUTHORITY- Nothing in this subsection limits or otherwise I affects any authority of the Administrator to regulate emissions of engines in marine vessels under this Act or any other provision of law.'. I THIS SEARCH THIS DOCUMENT GO TO Next Hit Forward New Balls Search - ._ ....._.... .... Prey Hit Back Ho_mePage Hat List Best Sections Help ......... ......._.._ _. Contents Display -_ THflMA.S Home I Contact I Ac..cAssibil.ity I Legal I USA.gov I --------- http://thomas.loc.gov/cgi-binJquery/D?cI 10:1:./temp/—c 110NRMDjh:: 4/24/2008 Search Results - THOMAS (Library of Congress) Page 1 of 5 The_Library of Congress > 7-HO`°lAS Home > Bills,,ResolUtiot)s > Search Results f t THIS SEARCH THIS DOCUMENT GO TO I Next Hit Forward New Bills Search !. Prev Hit Back HomeP_a3e Hit List Best Sections Help Contents Display j XM_L GPO's PDF EReerences ressional Record Bill Summary & Printer Friendly Display - Displ-ay Display - Status 10,832 bytes.[Help] Hel I Marine Vessel Emissions Reduction Act of 2007 (Introduced in House) I r HR 2548 IH t 110th CONGRESS F f 1st Session I H. R. 2548 To amend the Clean Air Act to reduce air pollution from marine vessels. IN THE HOUSE OF REPRESENTATIVES May 24, 2007 f Ms. SOLIS (for herself, Ms. HARMAN, Mrs. CAPPS, and Mr. WAXMAN) introduced the following bill; 4 which was referred to the Committee on Energy and Commerce E l t A BILL 1 To amend the Clean Air Act to reduce air pollution from marine vessels. i Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, i SECTI® `�1. SHORT TITLE. f f E This Act may be cited as the Marine Vessel Emissions Reduction Act of 2007'. S SEC. 2. FINDINGS. Congress finds that-- (1) emissions of air pollutants from marine vessels contribute significantly to dangerous air pollution in many areas in the United States; http://thomas.loc.gov/cgi-bin/thomas 4/24/200 Search Results - THOMAS (Library of Congress) Page 2 of 5 (2) current levels of control on those emissions are not adequate to protect air quality and public health; (3) to protect air quality and public health, efforts by State and local governments to control emissions from marine vessels must be augmented by the Federal Government; (4) although the Environmental Protection Agency may require additional controls on domestic and international marine vessels entering United States ports, significant emission reductions must be achieved in the near future; and (5) it is urgent and necessary to require the Administrator of the Environmental Protection Agency to establish standards to reduce emissions of air pollutants from marine vessels in a sufficient period of time to allow all areas in the United States to meet air quality standards in accordance with applicable deadlines. SEC. 3. MARINE VESSEL FUEL SULFUR. Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended-- (1) by redesignating the first subsection (r) (relating to fuel and fuel additive importers and importation) as subsection (u) and moving that subsection so as to appear at the end of the section; and (2) by inserting after subsection (o) the following: (p) Marine Vessel Fuel Sulfur- ' (1) IN GENERAL- Subject to paragraph (3), not later than December 15, 2008, the Administrator shall promulgate regulations that, effective beginning on December 31, 2010, require marine vessels described in paragraph (2) to use fuel that contains not more than 1,000 parts per million of sulfur in the main and auxiliary engines of the vessels. (2) APPLICABILITY- The regulations promulgated pursuant to paragraph (1) shall apply to all marine vessels, including any vessel flagged in a country other than the United States, at any time at which the vessels are, on entering or leaving a port or offshore terminal of the United States-- (A) within 200 miles of the west coast of the continental United States; and (B) within such distance of the east coast or Gulf coast of the United States, or the shoreline of the Great Lakes or St. Lawrence Seaway, as the Administrator determines to be appropriate for the purpose of protecting public health and the environment. (3) INTERIM REQUIREMENT- (A) IN GENERAL- Notwithstanding the requirement of paragraph (1), the Administrator may promulgate regulations under that paragraph that permit marine vessel fuel sulfur content in excess of 1,000 parts per million if the Administrator determines that compliance with the requirement of paragraph (1) is not technically feasible by December 31, 2010. (B) REGULATIONS- If the Administrator makes a determination described in httn://thomas.loc.vov/cgi-bin/thomas 4/24/2008 Search Results - THOMAS (Library of Congress) Page 3 of 5 subparagraph (A), the Administrator shall promulgate regulations that require marine vessels-- (i) beginning on December 31, 2010, to use fuel that contains-- ' (I) the lowest quantity of sulfur that is technically feasible by that date; and ' (II) in no event a quantity of sulfur in excess of 2,000 parts per million; and (ii) to achieve compliance with the requirement of paragraph (1) on the earliest practicable date by which compliance is technically feasible. (4) ALTERNATIVE COMPLIANCE MECHANISM- The Administrator may provide for an alternative mechanism of compliance under this subsection for a marine vessel if the Administrator determines that-- ' (A) the vessel employs a control technology that reduces emissions from the vessel of sulfur oxides and particulate matter to at least the same degree as the reduction that would be achieved by the vessel through compliance with the applicable fuel sulfur content limitation under this subsection; and ' (B) the emission reductions achieved as described in subparagraph (A) are in addition to any reductions required to achieve compliance with an applicable engine emission standard issued by the Administrator or the head of another Federal agency. (5) NO EFFECT ON OTHER AUTHORITY- Nothing in this subsection limits or otherwise affects any authority of the Administrator to regulate fuels or fuel additives for use in marine vessels or any other nonroad vehicle or engine under this Act or any other provision of law. SEC. 4. ADVANCED MARINE ®VESSEL EMISSION CONTROLS. Section 213 of the Clean Air Act (42 U.S.C. 7547) is amended-- (1) by redesignating subsection (d) as subsection (f); and (2) by inserting after subsection (c) the following: ' (d) Advanced Marine Vessel Emission Controls- (1) STANDARDS FOR OCEANGOING VESSELS- ' (A) IN GENERAL- Not later than December 15, 2008, the Administrator shall promulgate, and from time to time revise, regulations that establish standards for emissions of oxides of nitrogen, particulate matter, hydrocarbons, and carbon monoxide from newly-manufactured and in-use main and auxiliary engines in oceangoing marine vessels that enter or leave a port or offshore terminal of the United States. ' (B) REQUIREMENT- The standards under subparagraph (A) shall require, effective beginning on January 1, 2012, that the engines described in that subparagraph http://thomas.loc.gov/cgi-bin/thomas 4/24/200: Search Results - THOMAS (Library of Congress) Page 4 of 5 achieve the greatest degree of emission reduction achievable through the application of technology that the Administrator determines, in accordance with this paragraph, will be available for the affected engines. (C) ADDITIONAL FACTORS FOR CONSIDERATION- ` (i) IN GENERAL- In promulgating a standard under this paragraph, the Administrator shall take into consideration-- (I) whether the engine is newly-manufactured or in-use (and, if the engine is in-use, the age of the engine); (II) the cost of applying an emission reduction technology in a period of time sufficient to achieve compliance with the standard; ' (III) noise, energy, and safety factors associated with the application of the technology; and (IV) the feasibility, benefits, and costs of requiring-- (aa) the maximum level of control required by regulations applicable to on-road, nonroad, and stationary engines; and (bb) the maximum level of control achieved by sources from which control technologies may be transferred, including sources that use advanced aftertreatment technologies. (ii) DETERMINATION- ' (I) IN GENERAL- If the Administrator determines, after consideration of the factors described in clause (i), that a maximum level of control described in clause (i)(IV) will not be technically achievable by January 1, 2012, the Administrator shall promulgate standards under subparagraph (A) that require the maximum level of control that the Administrator determines will be technically achievable by that date. (II) ADDITIONAL STANDARDS- If the Administrator makes a determination under subclause (I), the Administrator shall promulgate additional standards under subparagraph (A) that require, effective beginning on January 1, 2016-- (aa) the maximum level of control described in clause (i)(IV); or (bb) if the Administrator determines, after consideration of the factors described in clause (i), that a maximum level of control described in subclause (IV) of that clause is not technically achievable by January 1, 2016, the maximum level of control that the Administrator determines will be technically achievable by that date. (2) APPLICABILITY- Standards applicable to marine engines and marine vessels promulgated under this section shall be applicable to vessels that enter or leave a port or offshore terminal of the United States, including vessels flagged in any country other than the United States. (3) ENFORCEMENT- htrn://thomas.loc.tzov/c�zi-bin/thomas 4/24/2008 REQUEST FOR COUNCIL ACTION MEETING DATE: 5/19/08 DEPARTMENT ID NUMBER: AD 08-06 Analysis: 1. SUPPORT Federal Bills S 1499 (Feinstein / Boxer) and HR 2548 (Solis) Marine Vessel Emissions Reduction Act—As Introduced These are companion bills designed to reduce the amount of pollutants emitted by cargo ships entering the nation's ports. Large marine vessels coming into our nation's ports do so mostly unregulated. Marine vessels burn fuel with extremely high sulfur content known as bunker fuel. Bunker fuel is a viscous substance laden with heavy metals, sulfur, and other polluting chemicals, and it is considered to be the dirtiest fuel in use anywhere. It averages approximately 27,000 parts per million (ppm) sulfur. Most equipment in the United States is required to burn fuel with no more than 15 ppm sulfur. Emissions from marine vessels in and around the U.S. ports have severe health effects. The high sulfur content of bunker fuel causes ships to emit over 50% of the sulfur pollution in Southern California. Particularly impacted are those cities at or near the ports. (The map included as attachment 2 depicts sulfur pollution levels in this region.) Because air pollution continues to be a serious and chronic problem for Southern California, impacting the health and well-being of our citizens, the Southern California Air Quality Management District and the Orange County Division of the League of Cities are urging Southern California cities to take a position in support of this legislation The Intergovernmental Relations Committee is recommending the City Council take a position in support of both of these bills. 2. OPPOSE SB 1338 (Migden) Workers' Compensation: Medical Treatment: Predesignation of Physicians —As Amended on 4/30/08 In 2004, SB 899 was signed into law. It included several reforms to the workers' compensation system. These reforms were successful in containing some of the soaring costs to employers associated with workers' compensation insurance. In order to transition employees into Medical Provider Networks as part of the reform package, workers were afforded the ability to pre-designate their personal physician in case of a work-place injury until April 30, 2007. Subsequently, in 2006, AB 2068 (Nava) was signed into law and extended the period in which employees could pre-designate to December 31, 2009. Additionally, it required the Administrative Director of the Division of Workers' Compensation (DWC),to conduct an evaluation of the current pre-designation system and present the findings to the Governor and the Legislature no later than December 31, 2008. SB 1338 would repeal the sunset date for provisions that allow an employee to pre-designate his/her primary treating physician for workers' compensation purposes. -2- 5/9/2008 9:44 AM REQUEST FOR COUNCIL ACTION MEETING DATE: 5/19/08 DEPARTMENT ID NUMBER: AD 08-06 Permanently deleting the sunset date enacted in AB 2068 prior to the DWC evaluation of the pre-designation system would allow workers to permanently pre-designate. In so doing, it would rollback important reforms implemented under SB 899 that have effectively contained medical treatment costs associated with workers' compensation. The Intergovernmental Relations Committee is recommending that the City Council take a position opposing SB 1338. 3. SUPPORT AB 2873 (Solorio / Silva) Counties: Sheriffs' Duties: Coastlines, Harbors, and Inland Waterways —As Amended on 4/14/08 Existing law requires each county in this state to have an elected sheriff. The sheriff is required to, among other things, preserve peace, as specified. The California Constitution provides that a city may make and enforce within its limits all local, police, sanitary and other ordinances and regulations that are not in conflict with general laws. Existing law also requires the sheriff of each county to give all possible aid and assistance to vessels stranded on its coast and to the persons on board, as specified. This bill would specifically authorize the Orange County Board of Supervisors to grant authorization to another law enforcement agency within the county to provide contract security and safety services along the county's coastlines and inland waterways. The bill also includes the following provisions: If the Board of Supervisors of the County of Orange grants a security services contract to a law enforcement agency within the county that is different than the previous law enforcement entity that provided these services on January 1, 2008, that agency shall employ and maintain at least the same number of qualified peace officers as defined by Section 830.1 of the Penal Code, that were employed by the previous law enforcement entity. This section shall not be construed to cancel or otherwise modify any agreement, contract, or service arrangement in place prior to January 1, 2009. Nothing in this section shall preclude any city within the County of Orange from providing existing city services and resources, including, but not limited to, lifeguards, fire, medical, and enforcement services at beaches along the coast. Nothing in this section shall authorize the Board of Supervisors of the County of Orange to, charge cities within the county for providing security and safety for the county's coastlines, harbors, and inland waterways. The Intergovernmental Relations Committee is recommending that the City Council take a position in support of AB 2873. 4. OPPOSE AB 2676 (Calderon) —Taxation: Transient Occupancy Tax—As Introduced -3- 5/9/2008 9:44 AM REQUEST FOR COUNCIL ACTION MEETING DATE: 5/19/08 DEPARTMENT ID NUMBER: AD 08-06 This bill would prohibit a city, county, or city and county that imposes a transient occupancy tax from retroactively imposing that tax in certain situations, as specified. This bill would also apply to charter cities. For Huntington Beach and many California cities, the transient occupancy tax has become an important and vital source of revenue, which is collected from guests who stay at hotels and similar lodging establishments. The ordinances implementing these local taxes vary in their wording, the level and type of activity that is taxed. This bill was created to in response to specific concerns within the City and County of San Francisco, as well as other matters. Unfortunately in attempting to address these local concerns, the author has created legislation that will seriously impact all local governments in California. It would limit our ability to make what should be a local decision based on our community's needs and on negotiations between the local agency and the local business community. Disputes over the interpretation of particular local ordinances are best resolved at the local level, rather than by creating one-size-fits-all legislation as is the case with this AB 2676. Additionally, this bill raises concern that it would require local governments to amend their ordinances, and that it could hinder a city's ability to appropriately audit the tax collection practices of hotel owners/operators to ensure they are in full compliance with local ordinances. In this time of fiscal instability, when both state and local government budgets are stretched thin, it is important to protect a local agency's ability to determine the reasonable use of the transient occupancy tax in light of the community's needs. The Intergovernmental Relations Committee is recommending that the City Council take a position opposing AB 2676. 5. SUPPORT League of California Cities Campaign to Reform Municipal Bond Ratings California Treasurer, Bill Lockyer, and ten other state treasurers are calling for reform to the way municipal bonds are rated. The current system of assigning credit ratings to bonds issued by governmental entities which provide essential services to the public leads to indefensible market discrimination against state and local municipal issuers. The rating agencies' own studies show that the likelihood of default by municipal borrowers is much lower than for corporate borrowers with similar ratings. Ratings should be based primarily on an evaluation of the likelihood investors will suffer a loss due to default. Unfortunately, for municipal bonds, they are not. This practice costs taxpayers enormous amounts of money that could be invested in public programs and infrastructure. The League of California Cities has joined these efforts and is urging California cities to take a position in support of Treasurer Lockyer's request to the bond rating companies to end the -4- 5/9/2008 9:44 AM REQUEST FOR COUNCIL ACTION MEETING DATE: 5/19108 DEPARTMENT ID NUMBER: AD 08-06 double standard in the treatment of municipal and corporate bonds by treating taxpayers the same as corporations and rating municipal bonds based on an investor's risk due to default. They are also urging the creation of a unified, global rating approach that treats all issuers equally, thereby better serving taxpayers and investors. The Intergovernmental Relations Committee is recommending that the City Council take a position in support of California Treasurer Bill Lockyer's effort to reform municipal bond ratings. Strategic Goals: Action on this legislation meets the strategic goal under City Services of providing quality public services with the highest professional standards to meet community expectations and needs, assuring that the city is sufficiently staffed and equipped overall. Environmental Status: NA Attachment(s): City Cleek's Page Number Np,. Des�Qription 1. Federal Bills S 1499 and HR 2548 & AQMD Fact Sheet 2. Map Depicting Areas Impacted by Marine Vessel Sulfur Emission 3. SB 1338 Mi den Labor Code Related to Workers' Compensation 4. SB 2873 (Solorio/Silva) Counties: Sheriffs Duties: Coastlines, Harbors, & Inland Waterways 5. AB 2676 Calderon Taxation: Transient Occupancy Tax 6. League's Memo Requesting Support for California Treasurer, Bill Lock er's efforts to Reform the Municipal Bond Ratings -5- 5/9/2008 9:44 AM �\ He OL" �����^ �\���•\����` ���"� �\�����° ���\ Search Results - THOMAS (Library of Congress) Page 1 of 5 The Library of_Congress> THOMAS Home > Bills, Resolutions > Search Results I i i THIS SEARCH THIS DOCUMENT GO TO Next Hit Forward New Bills Search r - Prev Hit Back HomePage Hit List Best Sections Help Contents Display I Bill 1 of 1000 GPO's_PDF Congressional Record Bill Summary & Printer FriendlvD' ay_ - 10,834 Display References Status 11bytes.[Help] Marine Vessel Emissions Reduction Act of 2007 (Introduced in Senate) S 1499 IS 110th CONGRESS 1st Session S . 1499 To amend the Clean Air Act to reduce air pollution from marine vessels. Ili! THE SENATE OF THE UNITED STATES I 1 May 24, 2®®7 3 Mrs. BOXER (for herself and Mrs. FEINSTEIN) introduced the following bill; which was read twice and j referred to the Committee on Environment and Public Works A BILL To amend the Clean Air Act to reduce air pollution from marine vessels. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, 3 i SECTION 1. SHORT TITLE. j This Act may be cited as the Marine Vessel Emissions Reduction Act of 2007'. i SEC. 2. FINDINGS. i 1 Congress finds that-- (1) emissions of air pollutants from marine vessels contribute significantly to dangerous air pollution in many areas in the United States; httn-//thomas.toe.gov/c2i-bin/auerv/D?c 110:1:./temp/—cl 1 ONRMDjh:: 4/24/2008 Search Results - THOMAS (Library of Congress) Page 2 of 5 (2) current levels of control on those emissions are not adequate to protect air quality and public health; (3) to protect air quality and public health, efforts by State and local governments to control emissions from marine vessels must be augmented by the Federal Government; (4) although the Environmental Protection Agency may require additional controls on domestic and international marine vessels entering United States ports, significant emission reductions must be achieved in the near future; and (5) it is urgent and necessary to require the Administrator of the Environmental Protection Agency to establish standards to reduce emissions of air pollutants from marine vessels in a sufficient period of time to allow all areas in the United States to meet air quality standards in accordance with applicable deadlines. SEC. 3. MARINE VESSEL FUEL SULFUR. Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended-- (1) by redesignating the first subsection (r) (relating to fuel and fuel additive importers and importation) as subsection (u) and moving that subsection so as to appear at the end of the section; and (2) by inserting after subsection (o) the following: (p) Marine Vessel Fuel Sulfur- ' (1) IN GENERAL- Subject to paragraph (3), not later than December 15, 2008, the Administrator shall promulgate regulations that, effective beginning on December 31, 2010, require marine vessels described in paragraph (2) to use fuel that contains not more than 1,000 parts per million of sulfur in the main and auxiliary engines of the vessels. ' (2) APPLICABILITY- The regulations promulgated pursuant to paragraph (1) shall apply to all marine vessels, including any vessel flagged in a country other than the United States, at any time at which the vessels are, on entering or leaving a port or offshore terminal of the United States-- ' (A) within 200 miles of the west coast of the continental United States; and (B) within such distance of the east coast or Gulf coast of the United States, or the shoreline of the Great Lakes or St. Lawrence Seaway, as the Administrator determines to be appropriate for the purpose of protecting public health and the environment. (3) INTERIM REQUIREMENT- ' (A) IN GENERAL- Notwithstanding the requirement of paragraph (1), the Administrator may promulgate regulations under that paragraph that permit marine vessel fuel sulfur content in excess of 1,000 parts per million if the Administrator determines that compliance with the requirement of paragraph (1) is not technically feasible by December 31, 2010. ' (B) REGULATIONS- If the Administrator makes a determination described in http://thomas.loc.gov/cgi-bin/query/D?c 110:1:./temp/—c 110NRMDjh:: 4/24/200 Search Results - THOMAS (Library of Congress) Page 3 of 5 subparagraph (A), the Administrator shall promulgate regulations that require marine vessels-- (i) beginning on December 31, 2010, to use fuel that contains-- (I) the lowest quantity of sulfur that is technically feasible by that date; and (II) in no event a quantity of sulfur in excess of 2,000 parts per million; and (ii) to achieve compliance with the requirement of paragraph (1) on the earliest practicable date by which compliance is technically feasible. (4) ALTERNATIVE COMPLIANCE MECHANISM- The Administrator may provide for an alternative mechanism of compliance under this subsection for a marine vessel if the Administrator determines that-- ' (A) the vessel employs a control technology that reduces emissions from the vessel of sulfur oxides and particulate matter to at least the same degree as the reduction that would be achieved by the vessel through compliance with the applicable fuel sulfur content limitation under this subsection; and (B) the emission reductions achieved as described in subparagraph (A) are in addition to any reductions required to achieve compliance with an applicable engine emission standard issued by the Administrator or the head of another Federal agency. ` (5) NO EFFECT ON OTHER AUTHORITY- Nothing in this subsection limits or otherwise affects any authority of the Administrator to regulate fuels or fuel additives for use in marine vessels or any other nonroad vehicle or engine under this Act or any other provision of law.'. SEC. 4. ADVANCED MARINE VESSEL EMISSION CONTROLS. Section 213 of the Clean Air Act (42 U.S.C. 7547) is amended-- (1) by redesignating subsection (d) as subsection (f); and (2) by inserting after subsection (c) the following: ' (d) Advanced Marine Vessel Emission Controls- (1) STANDARDS FOR OCEANGOING VESSELS- ' (A) IN GENERAL- Not later than December 15, 2008, the Administrator shall promulgate, and from time to time revise, regulations that establish standards for emissions of oxides of nitrogen, particulate matter, hydrocarbons, and carbon monoxide from newly-manufactured and in-use main and auxiliary engines in oceangoing marine vessels that enter or leave a port or offshore terminal of the United States. (B) REQUIREMENT- The standards under subparagraph (A) shall require, effective beginning on January 1, 2012, that the engines described in that subparagraph httn //thomas.loc.i2ov/cQi-bin/query/D?cl 10:1:./temp/—cl1ONRMDjh:: 4/24/2008 Search Results - THOMAS (Library of Congress) Page 5 of 5 (A) IN GENERAL- The standards established under this subsection shall be enforced in accordance with subsection (f). i (8) ENFORCEMENT AGAINST CERTAIN PERSONS- At the discretion of the Administrator, any standard established under this subsection relating to in-use engines may be enforced against-- i (i) the owner or operator of an in-use engine; 1 (ii) any person that rebuilds or maintains an in-use engine; or (iii) such other person as the Administrator determines to be appropriate. j ' (4) NO EFFECT ON OTHER AUTHORITY- Nothing in this subsection limits or otherwise affects any authority of the Administrator to regulate emissions of engines in marine vessels under this Act or any other provision of law.'. f I THIS SEARCH THIS DOCUMENT GO TO Next: Hit Forward New Bills Search Prev Hit Back HomePage Hit List Best Sections Help Contents Display i z 1 THOMAS Home I Contact I Accessibility I Legal I LISA.gov http://thomas.loc.gov/cgi-bin/thomas 4/24/200 � � p d 'y. �r A 4z ° M, " . ORANGE COUNTY COUNCIL OF GOVERNMENTS Cities Aliso Viejo Anaheim Brea Buena Park April 30, 2008 Costa Mesa Cypress Dana Point Fountain Valley The Honorable Dianne Feinstein, Senator Fullerton Ga den Grove United States Senate Huntington Beach 112 Hart Senate Office Building Irvine La Habra Washington, D. C. 20510 La Palma Laguna Beach Laguna Hills Laguna Niguel RE: Orange County Council of Governments: Support: Laguna Woods Lake Forest S 1499/HR 2548: Marine Vessel Emissions Reduction Act of 2007 Los A"tos Mission Viejo Newport Beach On behalf of the Orange County Council of Governments (OCCOG), I write to Orange express the unanimous support of the OCCOG Board of Directors for the Placentia Rancho Santa Margarita Marine Vessel Emissions Reduction Act of 2007 (S 1499 and HR 2548). San Clemente San Juan Capistrano Santa Ana The OCCOG Board of Directors recognizes that air pollution from goods Seal Beach movement activities is an existing and growing environmental and health concern Stanton Tustin for Southern California. The OCCOG Board of Directors also recognizes that Villa Park emissions from cargo ships entering the ports of Long Beach and Los Angeles are Westm nster Yorba Linda largely unregulated, with foreign-flagged ships responsible for 90 percent of County of Orange marine vessel emissions. Further, the OCCOG Board of Directors recognizes that marine vessels burn fuel, known as bunker fuel,which contains heavy metals, Agencies an extremely high sulfur content,and other polluting chemicals. Costa Mesa Sanitary District East Orange Water District El Toro Water District The increasing volume of goods moving in and through the Southern California Irvine Ranch Water District OC Sanitation District region from Southern California ports, challenges the region's air quality. OC Transportation Authority OC Water District Transportation Corridor Agencies The OCCOG therefore supports federal legislation that would: require cargo Interim Executive Director ships that enter Southern California ports to use cleaner burning, low-sulfur fuels; Dennis R.Wilberg and impose tougher emission standards for marine vessel engines. 949/470-3051 dx%ilberg@cityofnissic)nvlelo.org With the projected increase in the use of Southern California ports for goods 200 Civic Center movement activities, the passage of S 1499 and HR 2548 would significantly Mission Viejo,California 92691 improve the lives of residents living in Southern California by reducing air pollutants that are enutted from large marine vessels. S 1499/HR 2548 Page 2 For these reasons, the OCCOG Board of Directors supports S 1499/HR 2548 to grant authority to the U.S. Environmental Protection Agency to control emissions from domestic and foreign-flagged marine vessels. Respectfully, f Cheryl Brothers, Chair Board of Directors Orange County Council of Governments cc: The Honorable Barbara Boxer,U.S. Senate OCCOG Board of Directors Mr.Dennis Wilberg, OCCOG Interim Executive Director Ms. Debra Reed, South Coast Air Quality Management District Ms. Karen Hamman,OCCOG Interim Clerk of the Board Mr. Michael Litschi, OCTA Manager of Long-Range Strategies z4 1, 3 �' sk V. � - ` t $ ZT- 't ORANGE COUNTY COUNCIL OF GOVERNMENTS Cities Abso Viejo Anaheim Brea Buena Park April 30, 2008 Costa Mesa Cypress Dana Point Fountain valley The Honorable Barbara Boxer, Senator Fullerton Garden Grove United States Senate Huntington Beach 112 Hart Senate Office Building Irvine La Habra Washington, D.C. 20510 La Palma Laguna Beach Laguna Hills Laguna Niguel RE: Orange County Council of Governments: Support: Laguna Woods Lake Forest S 1499/HR 2548: Marine Vessel Emissions Reduction Act of 2007 Los Alamitos Mission Viejo Newport Beach On behalf of the Orange County Council of Governments (OCCOG), I write to Orange express the unanimous support of the OCCOG Board of Directors for the Placentia Rancho Santa Margarita Marine Vessel Emissions Reduction Act of 2007 (S 1499 and HR 2548). San Clemente San Juan Capistrano Santa Ana The OCCOG Board of Directors recognizes that air pollution from goods Seal Beach movement activities is an existing and growing environmental and health concern Stanton Tustin for Southern California. The OCCOG Board of Directors also recognizes that Villa Park emissions from cargo ships entering the ports of Long Beach and Los Angeles are Westminster Yorba Linda largely unregulated, with foreign-flagged ships responsible for 90 percent of County of Orange marine vessel emissions. Further, the OCCOG Board of Directors recognizes that marine vessels burn fuel, known as bunker fuel, which contains heavy metals, Agencies an extremely high sulfur content, and other polluting chemicals. Costa Mesa Sanitary District East Orange Water District El Toro Water District The increasing volume of goods moving in and through the Southern California Irvine Ranch Water District OC Sanitation District region from Southern California ports, challenges the region's air quality. OC Transportation Authority OC Water District Transportation Corridor Agencies The OCCOG therefore supports federal legislation that would: require cargo Interim Executive Director ships that enter Southern California ports to use cleaner burning, low-sulfur fuels; Dennis R.Wdberg and impose tougher emission standards for marine vessel engines. 949/470-3051 d,milberg@cityofrrissionviejo.org With the projected increase in the use of Southern California ports for goods zoo Civic center movement activities, the passage of S 1499 and HR 2548 would significantly Mission Viejo,California 92691 improve the lives of residents living in Southern California by reducing air pollutants that are emitted from large marine vessels. S 1499/HR 2548 Page 2 For these reasons, the OCCOG Board of Directors supports S 1499/HR 2548 to grant authority to the U.S. Environmental Protection Agency to control emissions from domestic and foreign-flagged marine vessels. Respectfully, Cheryl Brothers, Chair Board of Directors Orange County Council of Governments cc: The Honorable Dianne Feinstein, U. S. Senate OCCOG Board of Directors Mr. Dennis Wilberg, OCCOG Interim Executive Director Ms. Debra Reed, South Coast Air Quality Management District Ms. Karen Harriman, OCCOG Interim Clerk of the Board Mr. Michael Litschi, OCTA Manager of Long-Range Strategies f SIP F a Marine Vessel Emissions Reduction Act S 1499 (Boxer & Feinstein) & HR 2548 (Solis) Background Air pollution from goods movement activities is a significant and growing concern for Southern California residents. Studies confirm that exposure to harmful air pollutants, including toxic diesel emissions, increases mortality and hospital, physician and emergency room visits, as well as exacerbate respiratory illnesses including asthma. Over 70 percent of the airborne cancer risk in Southern California is directly attributed to diesel-fueled engines in the basin. The aggregated smog-forming and toxic diesel emissions from the ships, trains, trucks, and equipment at the ports of Long Beach and Los Angeles represent the largest single fixed source of air pollution in the Los Angeles Basin. Collectively, sources at the ports are responsible for more than 100 tons per day(tpd) of smog-forming and particulate-forming nitrogen oxides—more than the daily emissions from all 6 million-plus cars in the region. Emissions from local ports operations also contribute approximately 50 percent of the regional diesel particulate matter (DPM) emissions, which has been classified by the California Air Resources Board as a carcinogen. Without adequate actions to reduce emissions from good movement activities, this problem is only expected to worsen since the cargo throughput in Los Angeles Basin ports is projected to increase by up to 300 percent over the next 10 to 20 years. Problem Large ships, particularly foreign-flagged vessels, are the largest unregulated source of pollutants in Southern California. Marine vessels burn fuel with extremely high sulfur content - averaging approximately 27,000 parts per million (ppm). (By contrast, most equipment in the United States is required, or will be required, to burn fuel with no more than 15 ppm sulfur.) The high sulfur content of marine fuels causes ships to emit over 50 percent of the sulfur oxides (SOx) pollution in Southern California- one of the major components of soot and smog. If this region is to attain the federal PM2.5 standard by 2014, marine vessel SOx emissions must be reduced by over 90%. Solution The Marine Vessel Emissions Reduction Act requires ships to use cleaner-burning, lower-sulfur fuels that reduce health-threatening soot and smog-producing emissions when the ships are in or near U.S. ports. The bill also will impose tougher emissions standards for marine engines. MARINE VESSEL EMISSIONS REDUCTION ACT OF 2007 SUMMARY: • EPA is to limit the sulfur content of fuel used by domestic and foreign-flagged marine vessels when they enter or leave U.S. ports beginning December 31, 2010. • EPA must set the limit at no more than 1,000 parts per million unless EPA determines that such a level is not technically feasible by December 31, 2010. • EPA may set an interim standard as high as 2,000 parts per million, but must lower the standard to 1,000 parts per million by the earliest date that level is achievable. • The Administrator may provide for an alternative compliance mechanism if a vessel employs a control technology that reduces SOx emissions to at least the same degree as the reduction that would be achieved by compliance with the applicable fuel sulfur content limitation. • EPA is to set standards for new and in-use engines in domestic and foreign-flagged oceangoing vessels that enter or leave U.S. ports. The standards are to require the maximum degree of emission reduction for NOx, PM, hydrocarbons and carbon monoxide achievable by no later than January 1, 2012. Flog sfe se LM 155 x0 r r Problem Large marine vessels, including foreign-flagged ships,are mostly unregulated and a substantial source of pollutants. Marine vessels burn fuel with extremely s A high sulfur content known as bunker fuel, which averages approximately 27,000 parts per million (ppm) sulfur. [Most equipment in the U.S. is required, or will be required, to burn fuel with no more than 15 ppm sulfur.] Bunker fuel is a viscous substance laden with heavy metals,sulfur and other polluting chemicals and is the dirtiest fuel in use anywhere. _ Emissions from marine vessels in and around U.S. ports have severe health effects. Such vessels emit pollutants including nitrogen oxides(NOx) and sul- fur oxides (SOx), both of which are precursors of smog and particulates,and release cancer-causing diesel particulate matter which affect surrounding ports, as well as downwind regions. Foreign-flagged ships are responsible for about 90%of marine vessel emissions. The high sulfur content of bunker fuel causes ships to emit over 50%of the SOx pollution in Southern California. Also,ship emissions in that region will soon become the single largest source of NOx. If that region is to attain the federal PM2.5 standard by the 2014 deadline,marine vessel SOx emissions l[ must be reduced by over 90%. Such attainment by the federal deadline is not possible without the prompt adoption and implementation of vessel controls ` such as low sulfur fuels. A recent analysis by the South Coast Air Qual- ity Management District(SCAQMD)concluded that over 700 premature deaths would be prevented every year in the South Coast Basin if the ma- rine vessel controls in the State Implementation Plan were implemented. g This accounts for over one third of the health benefits of the entire SIP to attain ' the annual PM2.5 standard in the South Coast. Ship emissions also contribute . to particulates, ozone and toxics in many other areas of the country. Health ImpactsN Studies confirm that exposure to harmful air pollutants emitted by ships, including toxic diesel emissions, increases premature mortality and hospital, physician,and emergency room visits,and exacerbates respiratory illnesses including asthma,pneumonia,and bronchitis. Globally,it is estimated that premature mortality caused by ship emissions ranges from 19,000 to 64,000 annual deaths due to cardiopulmonary disease and lung cancer. The marine vessel emission prob- lem is only expected to worsen since goods movement and cargo throughput in U.S. ports is projected to substantially increase over the next 10 to 20 years. Premature mortalities on a global scale are estimated to grow by about 40%in 2012 due to large growth in global shipping activity. The South Coast Air Quality Management District Cleaning the.stir That 1,1%e Breathe Solution The Marine Vessel Emissions Reduction Act will achieve landmark reductions in emissions.The bill requires U.S. EPA to establish rules limiting fuel sulfur content in both , domestic and foreign-flagged ships traveling to U.S. ports both along the coastal waters and within the Great Lakes. y �� The limit, which would apply only within a certain number of miles from the U.S. coastline, would reduce fuel sulfur xF.. content to 1,000- 2,000 ppm sulfur by 2011. This is a sub- stantial but feasible reduction from current fuel sulfur levels of 27,000 ppm in large ocean-going ships. The bi11 would also require EPA to establish"maximum achievable"NOx, SOx and particulate emissions reduction standards for main &auxiliary ship engines. Benefits & issues There is an urgent need for this regulation. It will result in substantial emission reductions at a relatively low cost and will greatly assist in ensuring that rapidly approaching federal clean air deadlines are met. Marine vessel fuel costs will likely increase only slightly,and will be greatly exceeded by the monetized benefits of reduced health impacts. In addition,the environmental controls mandated by the bill should assist ports in obtaining public support for infrastructure improve- ments needed to efficiently handle projected cargo volumes—which should help attract business. A minimum national standard that meets the air quality needs of all areas of the country would help create a level playing field for ports nationwide. The marine vessel standards in the bill are feasible. For example,Maersk,the largest marine carrier in the world,recently began voluntarily using 2,000 ppm sulfur fuel within 24 miles of California ports. Addition- ally,this bill will send a strong message to the International Maritime Organization(IMO)that the U.S. is earnest about reducing marine vessel pollution,and will likely spur the IMO into action. MARINE VESSEL EMISSIONS REDUCTION ACT 2007 SUMMARY: • EPA is to limit the sulfur content of fuel used by domestic and foreign-flagged marine vessels, both in their main and auxiliary engines,when they enter or leave U.S. ports beginning December 31.,2010. • EPA must set the fuel content limit at no more than 1,000 ppm sulfur unless EPA determines that such a level is not technically feasible by December 31,2010. • EPA may set an interim standard as high as 2,000 ppm sulfur,but must lower the standard to 1,000 ppm sulfur by the earliest date that level is achievable. • The fuel content limit will apply within 200 miles of the U.S. west coast and within a distance to be determined by EPA for all other applicable U.S. coastlines/ shorelines. • The Administrator may provide for an alternative compliance mechanism if a vessel employs a control technology that reduces SOx and particulate emissions to at least the same degree as the reduction that would be achieved by compliance with the applicable fuel sulfur content limitation. • EPA is to set standards for new and in-use main and auxiliary engines in domestic and foreign-flagged oceangoing vessels that enter or leave U.S. ports. The standards are to require the maximum degree of emission reduction technologically achievable for NOx, particulate matter, hydrocarbons and carbon monoxide by no later than January 1,2012. For more information please contact SCAQMD staff: Oscar Abarca,William Sanchez,or Philip Crabbe at(909)396-2432. The South Coast Air Quality Management District Cleanin't, the Air That rla Breathe ;K. Attachment 2 Health Impacts from Ships are a Nationwide Problem At least 2,000 to 5,000 Premature Deaths Per Year in the continental U.S. are caused by Particulate Pollution from Oceangoing Vessels i Premature deans from, � i�ue lip EmissionS�V� " v" 10 25 _.� k 26-50 51 - 100 . , � •;.. r s 101 -200- AW 201'-31 0 �.>..., qY� 4 Y. •yp' .a /j A Cleaner marine fuels would reduce nationwide ship health impacts by - 60 % kz OCCOG TAC: 38 of 1,23 Source:Corbett,J.J.;Winebrake,J.J.;Green, E.H.; Kasibhatla,P.;Eyring,V.; Lauer,A.,Mortality from Ship Emissions:A Global Assessment. Environmental Science& Technology 2007,41,(24),8512-8518 \ H y «\ �� : . m��.\ % �� \ ^ \ S� > ��ƒ « : / : \ \ \ . d : )^ .> .� � � n.a.��, :�s �:�w . ««. �© .:. © �y: �<���, �-� Attachment 2 Health Impacts from Ships are a Nationwide Problem At least 2,000 to 5,000 Premature Deaths Per Year in the Continental D.S. are Caused by Particulate Pollution from Oceangoing Vessels , Premature deaths trorfi,PM M due to Ship Emissions ��. 10-25 F 26-50 3 51 - 100 1,01 -200 \ F 201 -300 Cleaner marine fuels would reduce f/ nationwide OCCOG TAC: 38 of 123 r_ Source:Corbett,J.J.;Winebrake,J.J.;Green, E. H.; Kasibhatla, P.; Eyring,V.; Lauer,A., Mortality from Ship Emissions:A Global Assessment. Environmental Science& Technology 2007, 41, (24),8512-8518 a :: SB 1338 Senate Bill - AMENDED Page 1 of 3 BILL NUMBER: SB 1338 AMENDED BILL TEXT AMENDED IN SENATE APRIL 30, 2008 INTRODUCED BY Senator Migden FEBRUARY 20, 2008 An act to amend Section 4600 of the Labor Code, relating to workers ' compensation. LEGISLATIVE COUNSEL'S DIGEST SB 1338, as amended, Migden. Workers ' compensation: medical treatment: predesignation of physician. Existing workers' compensation law generally requires employers to secure the payment of workers ' compensation, including medical treatment, for injuries incurred by their employees that arise out of, or in the course of, employment. Existing law, until December 31, 2009, provides an employee with the right to be treated by his or her personal physician from the date of injury if specified requirements are met, including a requirement that the physician agrees to be predesignated. This bill would delete the December 31, 2009, repeal date for those provisions pertaining to an employee's predesignation of a personal physician. Existing law requires the Division of Workers' Compensation to conduct an evaluation of certain predesignation provisions and present its-'findings to the Governor and the Legislature on or before December 31, 2008. This bill would delete that requirement. Vote: majority. Appropriation: no. Fiscal committee: -tee yes . State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 4600 of the Labor Code is amended to read: 4600. (a) Medical, surgical, chiropractic, acupuncture, and hospital treatment, including nursing, medicines, medical and surgical supplies, crutches, and apparatuses, including orthotic and prosthetic devices and services, that is reasonably required to cure or relieve the injured worker from the effects of his or her injury shall be provided by the employer. In the case of his or her neglect or refusal reasonably to do so, the employer is liable for the reasonable expense incurred by or on behalf of the employee in providing treatment. (b) As used in this division and notwithstanding any other provision of law, medical treatment that is reasonably required to cure or relieve the injured worker from the effects of his or her injury means treatment that is based upon the guidelines adopted by the administrative director pursuant to Section 5307.27 or, prior to the adoption of those guidelines, the updated American College of Occupational and Environmental Medicine's Occupational Medicine Practice Guidelines. (c) Unless the employer or the employer' s insurer has established a medical provider network as provided for in Section 4616, after 30 days from the date the injury is reported, the employee may be treated by a physician of his or her own choice or at a facility of his or her own choice within a reasonable geographic area. (d) (1) If an employee has notified his or her employer in writing http://www.leginfo.ca.gov/pub/07-08[bill/sen/sb_1301-1350/sb_133 8_bill_20080430_amended_sen_v98.h... 5/l/2001( S13 1338 Senate Bill - AMENDED Page 2 ,of 3 prior to the date of injury that he or she has a personal physician, the employee shall have the right to be treated by that physician from the date of injury if either of the following conditions exist: (A) The employer provides nonoccupational group health coverage in a health care service plan, licensed pursuant to Chapter 2 .2 (commencing with Section 1340) of Division 2 of the Health and Safety Code. (B) The employer provides nonoccupational health coverage in a group health plan or a group health insurance policy as described in Section 4616.7 . (2) For purposes of paragraph (1) , a personal physician shall meet all of the following conditions: (A) The physician is the employee' s regular physician and surgeon, licensed pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code. (B) The physician is the employee's primary care physician and has previously directed the medical treatment of the employee, and who retains the employee's medical records, including his or her medical history. "Personal physician" includes a medical group, if the medical group is a single corporation or partnership composed of licensed doctors of medicine or osteopathy, which operates an integrated multispecialty medical group providing comprehensive medical services predominantly for nonoccupational illnesses and injuries. (C) The physician agrees to be predesignated. (3) If the employer provides nonoccupational health care pursuant to Chapter 2 .2 (commencing with Section 1340) of Division 2 of the Health and Safety Code, and the employer is notified pursuant to paragraph (1) , all medical treatment, utilization review of medical treatment, access to medical treatment, and other medical treatment issues shall be governed by Chapter 2 .2 (commencing with Section 1340) of Division 2 of the Health and Safety Code. Disputes regarding the provision of medical treatment shall be resolved pursuant to Article 5 .55 (commencing with Section 1374 .30) of Chapter 2 .2 of Division 2 of the Health and Safety Code. (4) If the employer provides nonoccupational health care, as described in Section 4616.7, all medical treatment, utilization review of medical treatment, access to medical treatment, and other medical treatment issues shall be governed by the applicable provisions of the Insurance Code. (5) The insurer may require prior authorization of any nonemergency treatment or diagnostic service and may conduct reasonably necessary utilization review pursuant to Section 4610. (6) An employee shall be entitled to all medically appropriate referrals by the personal physician to other physicians or medical providers within the nonoccupational health care plan. An employee shall be entitled to treatment by physicians or other medical providers outside of the nonoccupational health care plan pursuant to standards established in Article 5 (commencing with Section 1367) of Chapter 2 .2 of Division 2 of the Health and Safety Code. (e) (1) When at the request of the employer, the employer' s insurer, the administrative director, the appeals board, or a workers' compensation administrative law judge, the employee submits to examination by a physician, he or she shall be entitled to receive, in addition to all other benefits herein provided, all reasonable expenses of transportation, meals, and lodging incident to reporting for the examination, together with one day of temporary disability indemnity for each day of wages lost in submitting to the examination. (2) Regardless of the date of injury, "reasonable expenses of transportation" includes mileage fees from the employee' s home to the httn://www.levinfo.ca.Rov/pub/07-08/bill/sen/sb 1301-1350/sb 1338 bill 20080430 amended sen v98.h... 5/1/2008 SB 1338 Senate Bill - AMENDED Page 3 of 3 place of the examination and back at the rate of twenty-one cents ($0 .21) a mile or the mileage rate adopted by the Director of the Department of Personnel Administration pursuant to Section 19820 of the Government Code, whichever is higher, plus any bridge tolls. The mileage and tolls shall be paid to the employee at the time he or she is given notification of the time and place of the examination. (f) when at the request of the employer, the employer' s insurer, the administrative director, the appeals board, or a workers' compensation administrative law judge, an employee submits to examination by a physician and the employee does not proficiently speak or understand the English language, he or she shall be entitled to the services of a qualified interpreter in accordance with conditions and a fee schedule prescribed by the administrative director. These services shall be provided by the employer. For purposes of this section, "qualified interpreter" means a language interpreter certified, or deemed certified, pursuant to Article 8 (commencing with Section 11435.05) of Chapter 4 .5 of Part 1 of Division 3 of Title 2 of, or Section 68566 of, the Government Code. http://www.leginfo.ca.gov/pub/07-08/bill/sen/sb_1301-1350/sb_1338_bill_20080430_amended sen_v98.h... 5/1/20W SB 1338 Senate Bill - Bill Analysis Page 1 of 6 ------------------------------------------------------------ ISENATE RULES COMMITTEE I SB 13381 Office of Senate Floor Analyses 1 ( 11020 N Street, Suite 524 1 (916) 651-1520 Fax: (916) 1327-4478 ------------------------------------------------------------ THIRD READING Bill No: SB 1338 Author: Migden (D) Amended: 4/30/08 Vote: 21 SENATE LABOR & INDUSTRIAL RELATIONS COMM 3-1, 4/23/08 AYES : Migden, Kuehl, Padilla NOES: Ackerman NO VOTE RECORDED: Wyland SUBJECT Workers compensation: medical treatment SOURCE California Labor Federation, AFL-CIO California Professional Firefighters VotersInjuredatwork.org DIGEST This bill deletes the December 31, 2009, sunset date in the Labor Code that eliminates the right of workers to predesignate a personal physician for the purposes of workers compensation. ANALYSIS Existing law generally requires employers to secure the payment of workers ' compensation, including medical treatment, for injuries incurred by their employees that arise out of, and in the course of, employment. If medical treatment is required, in most cases an injured worker is referred to, and placed under the care of, a physician chosen by the employer or insurance carrier for the first 30 days. After that period the injured worker is allowed to go to his/her own doctor for treatment, except in the circumstance where an employer or insurance carrier CONTINUED SB 1338 Page — 2 has established a "medical provider network (MPN) " as set httD://www.leginfo.ca.gov/pub/07-08/bill/sen/sb 1301-1350/sb_1338_cfa 20080430_114341_sen_floor.ht... 5/1/2008 SB 1338 Senate Bill - Bill Analysis Page 2 of 6 forth in Labor Code Section 4616 . (In that circumstance the employee must continue his/her medical treatment with a physician within the network. ) However, under specified circumstances, a worker has the right, prior to injury, to name a personal physician to be responsible for his/her medical treatment (including necessary referrals to specialists) in the event he/she later suffers an on-the-job injury. If the worker meets the eligibility criteria he/she may see his/her personal physician from the date of injury. In order for a worker to be eligible for this right, known as "predesignation" : 1.The individual must notify the employer in writing of the identity of the personal physician prior to the date of injury. 2 .The identified physician must be the employee's regular primary care physician and must be in possession of the employee' s medical records. 3 .The physician must agree to be predesignated. 4 .The worker' s employer must provide non-occupational health coverage in a group health plan. Existing law requires the Division of Workers' Compensation (DWC) to conduct an evaluation of the predesignation program and present its findings to the Governor and the Legislature on or before December 31, 2008 . This bill deletes the language in the Labor Code that provides that predesignation rights remain in effect only until December 31, 2009. This bill also deletes the requirement for an evaluation from the DWC. Comments If the sunset clause is not deleted and the sunset date is SB 1338 Page 3 reached, presumably employers and/or insurance carriers would thenceforth direct any and all injured workers to physicians specified by the employer/carrier for the initial 30-day period before the worker is allowed to go to the doctor of his/her own choice. Where an employer or carrier has established an MPN, the injured worker would lose the right to have both initial and on-going treatment by a doctor of his/her own choice outside the MPN. There are reasonable and legitimate public policy reasons http://w"w.leginfo.ca.gov/pub/07-08/bill/sen/sb 1301-1350/sb_1338_cfa_20080430_114341_sen_floor.ht... 5/1/200 SB 1338 Senate Bill - Bill Analysis Page 3 of 6 to allow an individual to be treated by his/her own doctor. A physician who has been seeing a worker for non-occupational illnesses will likely have a familiarity with the particular medical history of the person and is therefore more able to deliver appropriate treatment. This should result in more efficient medical care. Further, a recent study by the Workers' Compensation Research Institute (WCRI) and the Public Policy Institute of California (PPIC) found there are higher levels of worker satisfaction with the workers ' compensation system when injured workers are treated by their personal doctor and that there is little evidence of higher costs associated with predesignation in those cases. ( The Impact of Provider Choice on Workers ' Compensation Costs and Outcomes WCRI, PPIC; Victor, Barth, Neumark; November 20051 Evaluation Report. When Senate Labor Committee staff contacted the DWC to inquire about the progress of the report, the representative of the division responded that the division is not currently doing the study/evaluation and did not plan to. The representative said the reasons for that are: (1) It is extremely difficult to identify those who are predesignating and to compile that information and, (2) the division has not been provided any funds through the budget to conduct the study. Prior Legislation AB 2068 (Nava) , Chapter 819, Statutes of 2006 extended the sunset date on the right to predesignation from April 30, 2007 to December 31, 2009. It is currently on the Assembly Consent Calendar. FISCAL EFFECT Appropriation: No Fiscal Com. : No SB 1338 Page 4 Local: No SUPPORT (Verified 4/30/08) California Labor Federation, AFL-CIO (co-source) California Professional Firefighters (co-source) VotersInjuredatWork.org (co-source) Amalgamated Transit Union American Federation of State, County and Municipal Employees, AFL-CIO Association for Los Angeles Deputy Sheriffs California Alliance for Retired Americans California Applicants' Attorneys Association California Association of Professional Scientists California Association of Psychiatric Technicians California Conference of Machinists California Federation of Teachers California Medical Association California School Employees Association, AFL-CIO bttn://www.Ieginfo.ca.�-,ov/pub/07-08/bill/sen/sb 1301-1350/sb 1338 cfa 20080430 114341 sen floor.ht... 5/l/2008 SB 1338 Senate Bill - Bill Analysis Page 4 of 6 California State Employees Association, AFL-CIO California Teamsters Public Affairs Council Communications Workers of America, Local 9423 Consumer Federation of California District No. 1-PCD, MEBA, Marine Engineers ' Beneficial Association Electrical Workers ' Union, Local No. 340 Engineers and Scientists of California IFPTE Local 21 International Brotherhood of Electrical Workers International Longshore and Warehouse Union Kaiser Permanente Medical Care Program Los Angeles County Probation Officers' Union, AFSCME, Local 685 Los Angeles Police Protective League Organization of SMUD Employees Peace Officers Research Association of California Professional Firefighters Association of Santa Cruz County Registered Nurses of the California Nurse Association/National Nurses Organizing Committee Riverside Sheriffs ' Association San Bernardino Public Employees Association San Diego County Court Employees Association San Luis Obispo County Employees Association SB 1338 Page 5 Santa Rosa City Employees Association United Food and Commercial Workers Union, Western States Council UNITED HERE! United Transportation Union Worksafe, Inc. OPPOSITION (Verified 4/30/08) Acclamation Insurance Management Services California Association of Joint Powers Authorities California Chamber of Commerce California Coalition on Workers ' Compensation California Grocers Association California Manufacturers and Technology Association California Special Districts Association California State Association of Counties City of Arvin City of Bakersfield City of Ceres City of Chino City of Costa Mesa City of Emeryville City of Hanford City of Hesperia City of Highland City of Livingston City of Palo Alto http://www.leginfo.ca.gov/pub/07-08/bill/sen/sb_l 301-1350/sb_133 8_cfa_2008043 0_114341_sen_floor.ht... 5/l/2008 SB 1338 Senate Bill - Bill Analysis Page 5,of 6 City of Porterville City of Poway City of Rancho Cucamonga City of Rancho Mirage City of Rancho Palos Verdes City of Riverside City of Seal Beach City of South San Francisco City of Taft City of Vista CSAC-Excess Insurance Authority League of California Cities Municipal Pooling Authority National Federation of Independent Business Regional Council of Rural Counties Special District Risk Management Authority SB 1338 Page 6 ARGUMENTS IN SUPPORT Proponents argue that employees who are allowed to see their own doctors after sustaining a workplace injury typically return to work earlier because their satisfaction level is high. As a result employer costs are significantly reduced since employers do not as frequently find it necessary to train replacement workers or to have other workers take on more overtime. Proponents also note that amendments were made to Labor Code Section 4600 (d) in 2006 to clarify that a treating physician was to follow HMO and PPO guidelines in making referrals to other physicians, so treating physicians must follow group health guidelines for treatments and referrals. Finally, supporters reference the finding in the WCRI/PPIC study that shows that employer costs are no higher when workers choose a doctor they have a prior relationship with. ARGUMENTS IN OPPOSITION Opponents agree that an injured worker may be more comfortable using their family doctor and may well receive better treatment from a doctor who has a history of treating them over time. However, opponents do not believe that this benefits transfers to other physicians who may treat the injured worker for their industrial injury or illness following a referral from a primary treating physician. Opponents argue that any treatment outside that which is provided by the primary treating physician should be received inside the Medical Provider Network that would be otherwise applicable. NC:nl 4/30/08 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** httn://www.leginfo.ca.gov/pub/07-08/bill/sen/sb_1301-1350/sb_1338_cfa_20080430_114341_sen_floor.ht... 5/1/2008 SB'1338 Senate Bill - Bill Analysis Page 6 of 6 s http://www.leginfo.ca.gov/pub/07-08/bill/sen/sb_l301-1350/sb_1338_cfa 20080430_114341_sen_floor.ht... 5/l/2008 a z ; 9 Ww AB 2873 Assembly Bill - AMENDED Page 1 of 2 BILL NUMBER: AB 2873 AMENDED BILL TEXT AMENDED IN ASSEMBLY APRIL 14, 2008 AMENDED IN ASSEMBLY MARCH 28, 2008 INTRODUCED BY Assembly Members Solorio and Silva FEBRUARY 22, 2008 An act to add Section 26603 to the Government Code, relating to counties. LEGISLATIVE COUNSEL' S DIGEST AB 2873, as amended, Solorio. Counties : sheriffs ' duties : coastlines; harbors, and inland waterways. Existing law requires each county in this state to have an elected sheriff. The sheriff is required to, among other things, preserve peace, as specified. The California Constitution provides that a city may make and enforce within its limits all local, police, sanitary, and other ordinances and regulations that are not in conflict with general laws. Existing law also requires the sheriff of each county to give all possible aid and assistance to vessels stranded on its coast and to the persons on board, as specified. The bill would specifically authorize the Orange County Board of Supervisors to grant authorization to another law enforcement agency within the county to provide contract security and safety services along the county' s coastlines and inland waterways, as specified. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The, Legislature hereby finds and declares all of the following: (a) It is the intent of the Legislature that the authority for the security and safety of the county' s coastlines, harbors, and inland waterways in the County of Orange be granted to a law enforcement entity within the county that will employ skilled peace officers as defined by Section 830. 1 of the Penal Code, with the same minimum standards of training as those applying to the peace officers that were employed by the previous law enforcement entity on January 1, 2008 . (b) Given the importance of protecting against acts of terrorism, and providing cohesive and unambiguous protection to the residents of the County of Orange, the security of the county coastline, harbors, and inland waterways, and the corresponding safety of this vulnerable state border area are of statewide and national concern. SEC. 2 . Section 26603 is added to the Government Code, to read: 26603 . (a) The Board of Supervisors of the County of Orange may grant authorization to another law enforcement agency within the county to provide contract security and safety services along the county's coastlines and inland waterways, so long as the same minimum standards of training as those applying to the peace officers pursuant to Section 830 . 1 of the Penal Code that were employed by the previous law enforcement entity on January 1, ''—�-"`' 2008 , are maintained. (b) If the Board of Supervisors of the County of Orange grants a security services contract to a law enforcement agency within the http://info.sen.ca.gov/pub/07-08/bill/asm/ab_2851-2900/ab_2873_bill_20080414_amended_asm_v97.html 5/2/2W AB 2873 Assembly Bill - AMENDED Page 2 of 2 county that is different than the previous law enforcement entity that provided these services on January 1, 2008, that agency shall employ and maintain at least the same number of qualified peace officers as defined by Section 830.1 of the Penal Code, that were employed by the previous law enforcement entity. (c) This section shall not be construed to cancel or otherwise modify any agreement, contract, or service arrangement in place prior to January 1, 2009. (d) Nothing in this section shall preclude any city within the County of Orange from providing existing city services and resources, including, but not limited to, lifeguards, fire, medical, and enforcement services at beaches along the coast. (e) Nothing in this section shall authorize the Board of Supervisors of the County of Orange to charge cities within the county for providing security and safety for the county's coastlines, harbors, and inland waterways. SEC. 3 . The Legislature finds and declares that, because of the unique circumstances applicable to the County of Orange, a statute of general applicability cannot be enacted within the meaning of subdivision (b) of Section 16 of Article IV of the California Constitution, and, therefore, this special statute is necessary. http://info.sen.ca.gov/pub/07-08/bill/asm/ab 2851-2900/ab 2873 bill 20080414 amended asm v97.html 5/2/2008 f � I A K FOR ( ``-^ DATE TIME P.M: M /'UTtfON l ANN E w L G� OF_ PHONE/ MOBILE FAX MESSAGE vac's TELEPHONED I L ❑RETURNED YOUR CALL [ 'PLEASE CALL WILL CALL AGAIN ❑CAME TO SEE YOU ❑WANTS TO SEE YOU SJGNED r 4 i�sa.�_ T s - r si r trx Y M n h a 4 � r k 3 � (� � $an � 3 s i. �,,. C � ", ,p 3 y ... .. tad ...' ,,;; ,�" �.�. � .i:i.,, .... 3r f;r �: ,,, ,,,,.i. ,,, .,. ,... ,,, ».3. AB 2676 Assembly Bill - INTRODUCED Page 1 of') BILL NUMBER: AB 2676 INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Charles Calderon FEBRUARY 22 , 2008 An act to add Section 7282 .5 to the Revenue and Taxation Code, relating to taxation. LEGISLATIVE COUNSEL'S DIGEST AB 2676, as introduced, Charles Calderon. Taxation: transient occupancy tax. Existing law authorizes the legislative body of a city or county, or a city and county to impose a tax on transient occupancy of a room or living space in a hotel, inn, tourist home or house, motel or other lodging. Existing law also requires the legislative body of a city or county, or a city and county that elects to exempt from these taxes certain foreign, state, and local governmental employees and officers to create a form for these employees and officers to claim the exemption. This bill would make legislative findings and declarations regarding transient occupancy tax, and the retroactive imposition of those taxes by certain local taxing authorities. This bill would prohibit a city, county, or city and county that imposes a transient occupancy tax from retroactively imposing that tax in certain situations, as specified. This bill would also apply to charter cities. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature hereby finds and declares all of the following: (a) Virtually every city, county, and city and county in the State of California has enacted a tax on transient occupancy of hotels, inns, and similar transient lodging establishments. These taxes, commonly known as "transient occupancy tax" (or "TOT") , "bed tax, " or "hotel tax, " are universally imposed on the guest for the privilege of occupying a room in the transient lodging establishment. (b) Although the legal incidence of this tax falls on the guest, the ordinances which create and implement these taxes impose on the operators or owners of the lodging establishments, or both, the obligation to collect the tax and remit it to the local tax collection agency. Failure of an owner or operator to collect and remit the tax at the time, and in the manner, specified by the local transient occupancy tax ordinance subjects the owner and operator, or both, to civil liability, including penalties and interest on delinquent tax payments, among other liabilities and obligations. (c) Traditionally, these local transient occupancy taxes have been calculated by the taxing jurisdictions on the basis of multiplying the guest ' s room rate (the multiplicand) by the tax rate (the multiplier) . For example, if the room rate is fifty dollars ($50) per night and the local transient occupancy tax rate is 10 percent, the transient occupancy tax is five dollars ($5) for each night a guest stays at the establishment. (d) In recent years, however, many local transient occupancy tax jurisdictions have commenced interpreting their respective transient http://ct2k2.capitoltrack.com/Bills/asm/ab_2651-2700/ab_2676_bill 20080222_introduced.html 4/28/200 AB 2676 Assembly Bill - INTRODUCED Page 2,of 3 occupancy tax ordinances to start, for the first time, to include within the multiplicand to which the multiplier tax rate is applied amounts of money paid by guests over and above what they pay as the actual room rate for staying in the establishment. For example, in 2003, the San Francisco treasurer and tax collector advised transient lodging operators that the City and County of San Francisco' s hotel tax of 14 percent now applied to such things as "Charges for parking (including valet services) for hotel guests, " including, charges to hotel guests for parking located on the hotel premises regardless how charged, and charges to hotel guests for parking located off the hotel premises where such charge is added to the room bill and paid to the hotel operator. Prior to this time, the City and County of San Francisco had never imposed its transient occupancy tax on amounts guests paid for parking, had never informed lodging owners and operators that guests owed any such parking fees, and had never sought to collect transient occupancy tax on such parking fees . Thus, for example, if a guest in San Francisco paid two hundred dollars ($200) to stay in a guest room and also ($20) as a parking fee, the San Francisco transient occupancy tax amounts to thirty dollars and eighty cents ($30 .80) , instead of the twenty-eight dollars ($28) tax that applied prior to San Francisco's 2003 parking fee "guidelines. " Similarly, other jurisdictions have started to levy their transient occupancy taxes with respect to amounts and circumstances that had not been subject to those taxes previously. It is not uncommon for local jurisdictions to levy their respective transient occupancy taxes with respect to "complimentary" rooms, for which the lodging operator receives no consideration, attrition and cancellation fees in group contracts, and other charges paid by guests. (e) Similarly, a number of local transient occupancy tax jurisdictions have commenced interpreting their respective transient occupancy tax ordinances to require that guests who are exempt from that tax produce documentation over and above the documentation that was previously required by the tax jurisdiction to establish the guests ' right to the exemption. For example, many local jurisdictions exempt from their respective transient occupancy taxes employees of California and the federal government while traveling on official business. In order to be exempt from the transient occupancy tax, these guests are required to complete specified exemption documentation, as prescribed by the taxing authorities. Recently, at least one city has informed its transient lodging operators that even though their government-employee guests complete the same documentation that has always been required, the operators must now present actual government-issued travel orders as a prerequisite to being entitled to the exemption. Failure of the lodging operators to now collect such travel orders exposes the operator to liability for the tax which the exempt employee would have paid. (f) In the vast majority of the situations referred to in subdivisions (d) and (e) , the local taxing authorities have created these new tax liabilities without amending their respective transient occupancy tax ordinances and without seeking any approval from their respective electorates. (g) In a great many of the cases referred to in subdivisions (d) and (e) , the local taxing authorities have not only sought to apply these new tax rules prospectively, but they also seek to collect these amounts retroactively, in many cases up to three years. In such situations, the tax authorities have required lodging operators to pay the new tax amounts alleged to be owing, but also penalties and interest related thereto. (h) Inasmuch as the legal incidence of local transient occupancy taxes fall on the guests who stay in transient lodging establishments, regardless of the amount of the taxes, and inasmuch as lodging operators or owners, or both, are liable for collecting those taxes from the guests and remitting them to the taxing http://ct2k2.capitoltrack.com/Bills/asm/ab_2651-2700/ab_2676_bill_20080222_introduced.html 4/28/2008 AB 2676 Assembly Bill - INTRODUCED Page 3 of') authorities, it is imperative that lodging operators know at the time that they receive payment from their guests what the total transient occupancy tax liability will be so that they can collect the full amount owing and remit the same to the taxing authority. If, however, these new tax levies are applied retroactively, the lodging operator will be unable, both from a practical standpoint and from a legal standpoint, to obtain payment thereof from the people legally liable for the tax, the establishment' s guests. (i) The retroactive application of this type of new transient occupancy tax liability in those situations compels the impermissible shifting of the liability for the tax from the guest to the operator or owner, or both, of the transient lodging establishment. (j) Assuming that the types of new impositions of tax described in subdivisions (d) and (e) are lawful prospectively notwithstanding the fact that they did not receive approval by local voters as contemplated by Proposition 218, and notwithstanding the fact that many of them were imposed without formal amendment of the underlying transient occupancy tax ordinances (which issues the Legislature expressly declines to address in this legislation) , the Legislature finds and declares that the imposition of these new tax levies on a retroactive basis violates the fundamental due process rights of the owners and operators of transient lodging establishments, as guaranteed by Section 7 of Article 2 of the California Constitution, and therefore those tax levies should be prohibited. (k) The Legislature finds that this legislation is declaratory of existing constitutional law with respect to both general law cities and charter cities . SEC. 2 . Section 7282 .5 is added to the Revenue and Taxation Code, to read: 7282 .5 . (a) Notwithstanding any other provision of law, a city, county, or city and county shall not retroactively levy a transient occupancy tax, whether authorized by Section 7280, by local charter, or otherwise, in any amount in either of the following situations: (1) When the multiplicand amount which is multiplied by the transient occupancy tax rate is sought to be expanded by a jurisdiction to include any item, transaction, amount, type of charge, or type of payment, including, but not limited to, parking fees, attrition fees, complimentary rooms, cancellation fees, and "reward" or "point" redemptions, which is not expressly and with unambiguous specificity set forth in the jurisdiction's transient occupancy tax ordinance, and which was not previously taxed by the jurisdiction under its transient occupancy tax ordinance. (2) When the owner or operator of a transient lodging establishment presents the documentation, which the jurisdiction has previously required and found acceptable for purpose of establishing that any particular guest was entitled to exemption under the applicable transient occupancy tax ordinance, and the taxing authority determines that additional documentation or records will thereafter be required to establish that any particular guest was entitled to exemption under that ordinance. (b) This section shall also apply to charter cities. http://ct2k2.capitoltrack.com/Bills/asm/ab_2651-2700/ab_2676_bi11_20080222_introduced.html 4/28/200: The Honorable Charles Calderon Assembly Member, 58th District State Capitol, Room 2117 Sacramento, CA 95814 RE: AB 2676 (Calderon)—Taxation: Transient Occupancy Tax NOTICE OF OPPOSITION Dear Assembly Member Calderon: The City/Town of ' „ . respectfully opposes AB 2676 which prohibits a city or county from imposing a transient occupancy tax (TOT) retroactively in certain situations. For many California cities, TOT has become an important and vital source of revenue, which is collected from guests who stay at hotels and similar lodging establishments. The ordinances implementing these local taxes vary in their wording, the level and type of activity that is taxed. The four pages of intent language in the bill clearly indicate that the sponsors of this legislation have concerns about the application of ordinances within the City and County of San Francisco, as well as other matters. These disputes over the interpretation of particular local ordinances are best settled at the local level, rather than attempt to dictate a state-wide one-size-fits-all approach in this legislation. Furthermore, the drafting of this bill could be interpreted to require local governments to amend their ordinances. The bill may also hinder a city's ability to appropriately audit the tax collection practices of hotel owners/operators to ensure they are in full compliance with local ordinances. Finally, this bill, as drafted, could interfere with the collection of TOT that is owed to local governments and is the subject of an existing class action lawsuit over the practices of online-booking services that collected TOT, but did not fully remit those funds to local governments. In this time of fiscal instability, when both state and local government budgets are stretched thin, it is imperative to protect the accurate collection of this important source of local revenue. For these reasons, the City/Town of. must respectfully oppose AB 2676. Sincerely, Name, Title CC: Your Assembly Member/Senator J. Stacey Sullivan, Chief Consultant, Assembly Local Government Dan Carrigg, Legislative Director, League of California Cities = a . s2 — S�� �> \� . : « \. ` < e z ? ©� � « \ \ EAG 1400 K Street, Suite 400 • Sacramento, California 95814 Phone: 916.658.8200 Fax: 916.658.8240 -a O Ct' 1.11 CZRIN:[A: www.cacities.org .:� TO: City Officials FROM: Chris McKenzie, Executive Director SUBJECT: Invitation to Join Campaign to Reform Municipal Bond Ratings DATE: April 24, 2008 EXECUTIVE SUMMARY: On April 17 the League of California Cities board of directors unanimously endorsed a nationwide campaign to persuade the agencies that rate municipal and corporate bonds to end their long practices of discriminating against municipal bonds. This practice has cost taxpayers billions of dollars unnecessarily over the years through higher interest rates and bond insurance purchases. The League board urges individual cities to support this effort, adopt a resolution to that effect, and to communicate their support to the bond rating agencies. Background The turmoil in the municipal bond markets has brought into focus the higher standards imposed by the three major rating agencies in rating municipal bonds compared to corporate bonds, mortgage-backed securities and other debt instruments. As most investors know, state and local government entities rarely default on their bonds. Yet municipal ratings fail to reflect that fundamental fact. The rating agencies own studies show governmental, or municipal, issuers default much less than corporate issuers. • Municipal bonds rated Baa by Moody's have experienced a default rate of only 0.13 percent, while corporate bonds rated Aaa by Moody's have defaulted at four times that rate, or 0.52 percent. • Corporate bonds rated AAA by S&P have defaulted at almost twice the rate of municipal bonds rated BBB (0.60 percent and 0.32 percent, respectively). Standard & Poor's acknowledges that the historic rate of defaults of A-rated municipal bonds is 0.23 percent, while that of corporate bonds is 2.91 percent - or 13 times greater! • Of all general obligation municipal bonds rated by Moody's between 1970 and 2006, only one issuer defaulted. • For a tax-backed bond rated BBB or better by S&P, the likelihood of default over a 20-year period is only 0.03 percent. The downgrades of several bond insurers, and the higher costs that imposed on many municipalities with variable rate bonds backed by those insurers, has led to calls for 2 rating agency reform. In many cases public agencies seek bond insurance to secure higher ratings, thereby equalizing the differences between how municipal and corporate bonds of comparable risk are rated. This added cost to compensate for the discrimination against municipal bonds is staggering. California state officials estimate they have spent $102 million between 2003-07 on bond insurance for $9 billion of bonds to secure higher bond ratings (and lower interest rates as a result). California State Treasurer Bill Lockyer has been leading the campaign nationwide to end discrimination in municipal bond ratings. He was recently joined by 10 other state treasurers and financial officers from a number of local agencies, including the City of L.A., in calling on the three major rating agencies to examine their practices and treat municipal bonds on par with corporate bonds that expose investors to the same level of risk. The Treasurer also testified before the House Financial Services Committee on March 12 about the need for reform where widespread concern was expressed about this discriminatory practice. Standard & Poor's objects to the call for reform, claiming they have one consistent rating scale, despite the evidence of their own default studies to the contrary. Fitch acknowledges the existence of two scales and has announced it is undertaking a review of whether they should continue using two scales or move to a single scale. Moody's has taken the greatest strides. The firm announced that it will assign a corporate-equivalency rating (what it calls a global scale rating or GSR) alongside the traditional municipal rating to any municipal bond at the issuer's request. Action by Other Groups Recently the board of directors of the League of California Cities unanimously endorsed the call for reform in the municipal bond rating system to end the historic discrimination against municipal issuers that has cost taxpayers billions of dollars in higher interest and bond insurance costs over the years. The League sent a letter to the three rating agencies, endorsing the reform of the bond rating system. Other agencies and individuals supporting the reform effort are listed on a website established by Treasurer Lockyer for this purpose at httn://www.treasurer.ca.gov/fairbondratings/index.asp. For More Information or Press Inquires You can find much more information on this issue at the above website. You also can refer press calls to Tom Dresslar at 916-653-2995 in the State Treasurer's Office, which is coordinating this campaign nationwide. RECOMMENDATION: The League urges individual cities to consider joining the campaign by adopting the attached resolution and sending a letter with the resolution to the rating agencies. A RESOLUTION SUPPORTING REFORM OF THE BOND RATING SYSTEM TO ELIMINATE DISCRIMINATION AGAINST MUNICIPAL BONDS WHEREAS, the recent turmoil in the municipal bond markets has brought into focus the higher standards imposed by the three major bond rating agencies in rating municipal bonds compared to corporate bonds, mortgage-backed securities and other debt instruments; and WHEREAS, issuers of municipal bonds rarely default on the bonds they sell to finance streets and roads, public buildings, bridges, flood protection and water systems, and other critical infrastructure, yet municipal bond ratings fail to reflect that fundamental fact; and WHEREAS, the rating agencies even acknowledge this disparity, but they ignore it in their ratings. Standard & Poor's, for example, acknowledges that the historic rate of defaults of A-rated municipal bonds is 0.23 percent, while that of corporate bonds is 2.91 percent - or 13 times greater; and WHEREAS, despite the relative default rates shown by their own data, the rating agencies continue to discriminate against municipal issuers, requiring public agencies to secure expensive bond insurance in order to secure bond ratings comparable to those of private corporations; and WHEREAS, the rating agencies base their ratings of corporate bonds on the risk the issuer will default. Their ratings of municipal bonds, in contrast, have little relationship to the risk of default. This difference provides a substantial economic benefit at the expense of taxpayers across the nation; and WHEREAS, a coalition of state and local public agencies, led by California State Treasurer Bill Lockyer, has called on the three major rating agencies to examine their practices and treat municipal bonds on par with corporate bonds that expose investors to the same level of risk. The Treasurer also testified before the House Financial Services Committee on March 12 about the need for reform. WHEREAS, the response by the rating agencies to the call for reform has been uneven. Moody's has taken the greatest strides, announcing it will assign a corporate- equivalency rating (what it calls a global scale rating or GSR) alongside the traditional municipal rating to any municipal bond at the issuer's request; and WHEREAS, the current double-standard by rating agencies: (1) drains billions of dollars from taxpayers' pockets in the form of unfairly high interest rates; (2) forces taxpayers to pay even more money to buy bond insurance—insurance they would not have to purchase if municipal bond ratings accurately reflected the slight risk of default; (3) misleads investors by grossly inflating the risk of buying municipal bonds; and (4) undermines the effective functioning of a transparent market. RESOLVED, by the City Council of the City of that it calls on the major municipal bond agencies to end the double standard in the treatment of municipal and corporate bonds; to treat taxpayers the same as corporations and rate municipal bonds based on the risk of default; and to create a unified, global rating approach that treats all issuers equally, and better serves taxpayers and investors. RESOLVED FURTHER, that the city manager/finance officer is hereby directed to notify the municipal bond rating agencies by letter of the adoption of this resolution, with a copy to California State Treasurer Bill Lockyer and to register the City as a member of the coalition of public agencies supporting the nationwide effort to reform how bond rating agencies grade state and local bonds. ADOPTED this day of 12008. Sample Letter to Rating Agencies 2008 Mr. Robert Grossman Ms. Gail Sussman Mr. William Montrone Group Managing Director Group Managing Director Head U. S. Public Finance Public Finance U.S. Public Finance Dept Fitch Ratings Moody's Investors Service Standard & Poor's 33 Whitehall Street, 27th Fl. 250 Greenwich Street 55 Water Street New York, NY 10004 New York, NY 10007 New York, NY 10041 SUBJECT: Ending Double Standard in Ratings of Municipal and Corporate Bonds Dear Mr. Grossman, Ms. Sussman and Mr. Montrone, The current system of assigning credit ratings to bonds issued by governmental entities which provide essential services to the public leads to indefensible market discrimination against state and local municipal issuers. The rating agencies' own studies show that the likelihood of default by municipal borrowers is much lower than for corporate borrowers with similar ratings. Ratings should be based primarily on an evaluation of the likelihood investors will suffer a loss due to default. Unfortunately, for municipal bonds, they are not. This practice costs taxpayers enormous amounts of money that could be invested in public programs and infrastructure. The City Council of recently adopted a resolution (copy enclosed), urging your companies to end the double standard in the treatment of municipal and corporate bonds. The City Council urges you to treat taxpayers the same as corporations and rate municipal bonds based on the risk investor loss due to default. Finally, we urge you to do this by creating a unified, global rating approach that treats all issuers equally, thereby better serving taxpayers and investors. Thank you. Sample Staff Report TO: City Council FROM: , City Manager (or Finance Director) DATE: SUBJECT: Campaign to Save Tax Funds by Ending Discrimination by Bond Rating Agencies in the Grading of Municipal Bonds Issue: Should the City Council endorse the campaign to end discrimination by municipal bond rating agencies against local and state governments, and the taxpayers they represent, in the way in which ratings are assigned to municipal bond issues? Background The turmoil in the municipal bond markets has brought into focus the higher standards imposed by the three major rating agencies in rating municipal bonds compared to corporate bonds, mortgage-backed securities and other debt instruments. As most investors know, state and local government entities rarely default on their bonds. Yet municipal ratings fail to reflect that fundamental fact. The rating agencies own studies show governmental, or municipal, issuers default much less than corporate issuers. • Municipal bonds rated Baa by Moody's have experienced a default rate of only 0.13 percent, while corporate bonds rated Aaa by Moody's have defaulted at four times that rate, or 0.52 percent. • Corporate bonds rated AAA by S&P have defaulted at almost twice the rate of municipal bonds rated BBB (0.60 percent and 0.32 percent, respectively). Standard & Poor's acknowledges that the historic rate of defaults of A-rated municipal bonds is 0.23 percent, while that of corporate bonds is 2.91 percent - or 13 times greater! • Of all general obligation municipal bonds rated by Moody's between 1970 and 2006, only one issuer defaulted. • For a tax-backed bond rated BBB or better by S&P, the likelihood of default over a 20-year period is only 0.03 percent. The downgrades of several bond insurers, and the higher costs that imposed on many municipalities with variable rate bonds backed by those insurers, has led to calls for rating agency reform. In many cases public agencies seek bond insurance to secure higher ratings, thereby equalizing the differences between how municipal and corporate bonds of comparable risk are rated. This added cost to compensate for the discrimination against municipal bonds is staggering. California state officials estimate they have spent $102 million between 2003-07 on bond insurance for $9 billion of bonds to secure higher bond ratings (and lower interest rates as a result). Sample Staff Report California State Treasurer Bill Lockyer has been leading the campaign nationwide to end discrimination in municipal bond ratings. He was recently joined by 10 other state treasurers and financial officers from a number of local agencies, including the City of L.A., in calling on the three major rating agencies to examine their practices and treat municipal bonds on par with corporate bonds that expose investors to the same level of risk. The Treasurer also testified before the House Financial Services Committee on March 12 about the need for reform where widespread concern was expressed about this discriminatory practice. Standard & Poor's objects to the call for reform, claiming they have one consistent rating scale, despite the evidence of their own default studies to the contrary. Fitch acknowledges the existence of two scales and has announced it is undertaking a review of whether they should continue using two scales or move to a single scale. Moody's has taken the greatest strides. The firm announced that it will assign a corporate-equivalency rating (what it calls a global scale rating or GSR) alongside the traditional municipal rating to any municipal bond at the issuer's request. Action by Other Groups Recently the board of directors of the League of California Cities unanimously endorsed the call for reform in the municipal bond rating system to end the historic discrimination against municipal issuers that has cost taxpayers billions of dollars in higher interest and bond insurance costs over the years. The League sent a letter (attached) to the three rating agencies, endorsing the reform of the bond rating system. Other agencies and individuals supporting the reform effort are listed on a website established by Treasurer Lockyer for this purpose at http://www.treasurer.ca.gov/fairbondratings/index.asp. Staff Recommendation Staff recommends adoption of the attached resolution, endorsing the reform campaign and calling on the municipal bond agencies to end discrimination in the rating of municipal bonds, a practice that has cost taxpayers untold billions of dollars in interest costs in recent decades. RCA ROUTING SHEET INITIATING DEPARTMENT: Administration SUBJECT: Intergovernmental Relations Recommendations COUNCIL MEETING DATE: May 19, 2008 RC„A AT�TCHIVINTS . Wo STATUS E Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map, Location Map and/or other Exhibits Attached ❑ Not Applicable Contract/Agreement (w/exhibits if applicable) Attached ❑ (Signed in full by the City Attorney) Not Applicable Subleases, Third Party Agreements, etc. Attached ❑ (Approved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attorney) Attached ❑ Not Ap licable Fiscal Impact Statement (Unbudgeted, over $5,000) Attached ❑ Not Applicable Bonds (If applicable) Attached El Not Ap licable Staff Report (If applicable) Attt A educable El Commission, Board or Committee Report (If applicable) Attached ❑ Not Ap licable Findings/Conditions for Approval and/or Denial Attached ❑ Not Applicable W_ u EXF'LAN TICS... FR,_MtS;StNG ATTACHMENTS n EVOyE �D ; RETURNED RDED s_ Administrative Staff Assistant City Administrator Initial City Administrator Initial City Clerk ( ) EXPLANATION FOR RETURN OF ITEM: Only) RCA Author: Dapkus r s ry„ CITY OF HUNTINGTON BEACH 0 Office of the City Administrator To: Honorable Mayor & City Council Member From: Patricia Dapkus, Department Analyst, Sr. Date: May 15, 2008 Subject: Late Communication on Item F-1, Recommendation 1— Support for Federal Bills S1499 and HR2548 Marine Vessel Emissions Attached is a second map more clearly depicting the areas impacted by sulfur emissions from large marine vessels that come into the Los Angeles and Long Beach Ports. Attachment— Map title: "Pollution from Marine Vessels Creates Significant Cancer Risk Over a Wide Area." /9 00 [RONU DOR from Miv alroha WaSOMS crrs)aft)a 3ognoToCaM canoes Maks OO wev a Mods Alma Cancer Risk From Ship Emissions in Southern California Ventura LosAngelas County San Bernardino Count\ Port Hueneme Glendale �asadena • San Bernardino remont • to$Angeles ^ • -- - Santa Alonica • 1 Chino Hills • Riverside Lavtndolc „ . ..1.. -M Partc Corona ,. .... Torrence • Anaheim • • Riverside Count\ Orange County Irvine Antinnton Beach ,. - - .:• - -r::' - - Mission Viejo rea hown , ion Ship pollu tion causes maximum cancer risk exceeding 1,200 in a million Legend Increasing Cancer Risk Risk/Million zs zs•ioo 0,m•zoo Q zoo•soo Q wo•aoa Q<oo•aoo Q aoo soo Q.eoo•.,,coo Q,,coo ,.zoo >,.zoo OCCOG TAC: 39 of 123 Source: SCAQMD MATES III Study(2008) V0/ Ib/ZVVt$ Ir .Zb rnn AIbA104100 nom avow ov�vniv u - • STATE CAPITOL, COMUAPPROPRIATIONS PO.BOX Aa284A *W.PMh1gAPP4iOPRIA7tONS SACRAMENTO,CA W49-0068 EDUCATION (916)319.2069 /�'� • • PUBLIC SAFETY(CHAIR) FAX(910)319.2169 oCLA�ifor1l in �rgtislafurr TRANSPORTATION DISTRICT OFFICE 2400 E.KATELLA AVENUE,STE.640 g�•>_ �A� ANAHEINAHEIM•CA 92806 FAX(71 a)939-8986 ,,� •J�`'—I e-mail:aasembl)�er.sobrio® assombtyCa•pa+ JOSE SOLORiO websiie:www.assemblIrea-gov/sotorio ASSEMBLYMAN.SIXTY-NINTH DISTRICT May 16,2008 Hon. John M.W. Moorlach, Chair Hon.Patricia C. Bates, Vice Chair Hon. Janet Nguyen Hon. Bill Campbell Hon. Chris Norby Dear Supervisors: I. have taken the action of placing AB 2873 (Harbor Patrol Bill)in the inactive bill file on the Assembly Floor. The bill had passed the Assembly Public Safety Committee unanimously. Currently, the 48 miles of Orange County coastline arc protected adequately by the Orange County Harbor Patrol, and it is my understanding there are no current plans to shift law enforcement responsibilities to other cities or agencies. 1 was also recently informed that only an"elected"sheriff can take formal positions on legislation. As long as the harbors are.secure.I believe further consideration of this legislation should wait until an elected Orange County sheriff is on the job and can weigh in on matters affecting his or her department. Assemblyman Silva and I look forward to working with you,the impacted cities, the deputy sheriffs and the new sheriff to maintain the current level of highly skilled and well trained patrol officers now in place. Slnccrt;ly. JOSE SOLORIO State Assemblyman cc: Hon. Jim Silva, State Assemblyman Members,Newport Reach City Council Mernbcrs, Iluntington Beach City Council Jack Anderson, Acting Sberiff, Orange County Wayne Quint, President, Orange County Deputy Sheriffs Representing Anaheim.Garden Grove,and Santa Ana Primed on RR"feedd PaPer n